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subodh pawar
subodh pawar

This document describes a mixed economy, which combines elements of capitalist and socialist systems. A mixed economy allows for private ownership and business but also involves government intervention and public ownership of some industries and services. It aims to balance economic goals like efficiency with social goals like equal distribution of income. The government regulates prices in some industries and taxes private income to fund social programs. A mixed economy has advantages like competition keeping prices low and public services providing jobs and welfare. However, it also has disadvantages like heavy taxation reducing business incentives and an imbalance between private and public sectors hindering faster development.

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Mixed Economy 1.Capitalist- private ownership ,labor ,personal profit and investment . e.g .NewZeland-Private Property , few taxes few regulations. 2.Socialist- Govt bodies and planning council e.g. North Koria - Production is entirely Controlled by Govt 3.Mixed Economic System which has mix capitalist and socialist system to solve Basic Economic Problem 1.What to produce? 2.How to Produce? 3.For Whom to produce? The Means of production are owned and handled by private sector as well as govt.
Goal : Equal Distribution of income Method : high taxes Circular Flow Model.
Characteristics 1.Govt<->Entrepreneur to do business freely and government encourages them by providing infrastructure and facilities. 2.Price mechanism &economic plan to make decisions. Controlled Items Govt. Control items and their price 3.Govt Control Income Difference. income tax and then its is used for social welfare
4.Govt Will interfere in industry that produce unsafe goods such as weapons,guns,sword. 5.Govt help private sector on non-profitable projects i.e. Govt provides House , Transportation , Telecommunication.
Advantage of Mixed Economy 1.Competititon keeps prices low. 2.Consumer choice 3.Private sector encouraged for profits by providing services. 4.Public Sector seeks to avoid regional inequalities, provides large employment opportunities and often its price policy is guided by considerations of economic welfare rather than by profit motive.
Disadvantages of mixed Economy 1.Heavy Tax Heavy tax reduces incentives to work hard and make profit. 2.Less efficient than private sector public sector efficiency is lacking and corruption, discrimination and red- tapism are the evils spread in the public sector. 3.Concentration of wealth in few hands Although it is said that the mixed sector minimizes economic concentration but in practice the private-entrepreneurs take the advantage of government policy and accumulate wealth since both the private and public sectors co- exist, the government will not be in a position to impose any stringent steps to prevent economic concentration. 4.Own Market business men are needed to find their own market for products.
Disadvantages 5. Low inflow of Foreign Capital: Because of the government policy and the fear of nationalisation there is less possibility of inflow of foreign capital which is very essential of the development of private sector. 6. Fear of Nationalisation: The private entrepreneurs are much worried about the government policy to nationalise private enterprises in certain situations. 7. Presence of Imbalance in the Economy: The mixed economy cannot provide faster development as the government simply wants to maintain a balance between the private and public sectors. The policies of the government are not so clear or it facilitates to give any direction with the result, there exists non-clarity of objectives and presence of imbalance in the economy.
Conclusion ->defects of the mixed economy seen above are not so acute that they cannot be overcome. ->Given efficient and honest administrative machinery, the defects of the public sector can be removed. -> The private sector can be made to work more efficiently by proper control and direction. ->By adopting monetary and physical control measures, economic fluctuations can be eliminated.
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  • 1. Mixed Economy 1.Capitalist- private ownership ,labor ,personal profit and investment . e.g .NewZeland-Private Property , few taxes few regulations. 2.Socialist- Govt bodies and planning council e.g. North Koria - Production is entirely Controlled by Govt 3.Mixed Economic System which has mix capitalist and socialist system to solve Basic Economic Problem 1.What to produce? 2.How to Produce? 3.For Whom to produce? The Means of production are owned and handled by private sector as well as govt.
  • 2. Goal : Equal Distribution of income Method : high taxes Circular Flow Model.
  • 3. Characteristics 1.Govt<->Entrepreneur to do business freely and government encourages them by providing infrastructure and facilities. 2.Price mechanism &economic plan to make decisions. Controlled Items Govt. Control items and their price 3.Govt Control Income Difference. income tax and then its is used for social welfare
  • 4. 4.Govt Will interfere in industry that produce unsafe goods such as weapons,guns,sword. 5.Govt help private sector on non-profitable projects i.e. Govt provides House , Transportation , Telecommunication.
  • 5. Advantage of Mixed Economy 1.Competititon keeps prices low. 2.Consumer choice 3.Private sector encouraged for profits by providing services. 4.Public Sector seeks to avoid regional inequalities, provides large employment opportunities and often its price policy is guided by considerations of economic welfare rather than by profit motive.
  • 6. Disadvantages of mixed Economy 1.Heavy Tax Heavy tax reduces incentives to work hard and make profit. 2.Less efficient than private sector public sector efficiency is lacking and corruption, discrimination and red- tapism are the evils spread in the public sector. 3.Concentration of wealth in few hands Although it is said that the mixed sector minimizes economic concentration but in practice the private-entrepreneurs take the advantage of government policy and accumulate wealth since both the private and public sectors co- exist, the government will not be in a position to impose any stringent steps to prevent economic concentration. 4.Own Market business men are needed to find their own market for products.
  • 7. Disadvantages 5. Low inflow of Foreign Capital: Because of the government policy and the fear of nationalisation there is less possibility of inflow of foreign capital which is very essential of the development of private sector. 6. Fear of Nationalisation: The private entrepreneurs are much worried about the government policy to nationalise private enterprises in certain situations. 7. Presence of Imbalance in the Economy: The mixed economy cannot provide faster development as the government simply wants to maintain a balance between the private and public sectors. The policies of the government are not so clear or it facilitates to give any direction with the result, there exists non-clarity of objectives and presence of imbalance in the economy.
  • 8. Conclusion ->defects of the mixed economy seen above are not so acute that they cannot be overcome. ->Given efficient and honest administrative machinery, the defects of the public sector can be removed. -> The private sector can be made to work more efficiently by proper control and direction. ->By adopting monetary and physical control measures, economic fluctuations can be eliminated.